Kontek, Krzysztof (2010): Decision Utility Theory: Back to von Neumann, Morgenstern, and Markowitz.

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Abstract
Prospect Theory (1979) and its Cumulative version (1992) argue for probability weighting to explain lottery choices. Decision Utility Theory presents an alternative solution, which makes no use of this concept. The new theory distinguishes decision and perception utility, postulates a double Sshaped decision utility curve similar to one hypothesized by Markowitz (1952), and applies the expected decision utility value similarly to the theory by von Neumann and Morgenstern (1944). Decision Utility Theory proposes straightforward risk measures, presents a simple explanation of risk attitudes by using the aspiration level concept, and predicts that people might not consider probabilities and outcomes jointly, on the contrary to the expected utility paradigm.
Item Type:  MPRA Paper 

Original Title:  Decision Utility Theory: Back to von Neumann, Morgenstern, and Markowitz 
Language:  English 
Keywords:  Expected Utility Theory, Markowitz Hypothesis, Prospect Theory, Decision Utility, Allais Paradox, Common Ratio Effect, Risk Attitude Measures, Aspiration Level. 
Subjects:  D  Microeconomics > D0  General > D03  Behavioral Economics; Underlying Principles D  Microeconomics > D8  Information, Knowledge, and Uncertainty > D81  Criteria for DecisionMaking under Risk and Uncertainty C  Mathematical and Quantitative Methods > C9  Design of Experiments > C91  Laboratory, Individual Behavior 
Item ID:  27141 
Depositing User:  Krzysztof Kontek 
Date Deposited:  01. Dec 2010 15:19 
Last Modified:  11. Feb 2013 17:22 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/27141 